HC questions BB circular

The High Court (HC) questioned on Monday a circular of the Bangladesh Bank (BB) that had asked the non-bank financial institutions (NBFIs) to adjust their capital market investment without providing any reasonable period of time.

The court issued a rule upon the government bodies concerned to explain in four weeks as to why the BB circular should not be declared illegal, and the respondents should not be directed to provide a period of three years to the NBFIs to adjust their capital market investment.

The Ministry of Finance along with the BB governor and the general manager of Department of Financial Institutions and Markets (DFIM) were asked to comply with the rule.

The HC bench of Justice Zafar Ahmed and Justice Kazi Zinat Hoque passed the order after hearing a writ petition, filed challenging legality of the BB circular - issued on February 15.

Tauhidul Islam, a businessman and a shareholder investor of several securities including IPDC Finance Limited, filed the petition on Monday.

Lawyer Mohammad Ullah appeared in the hearing on behalf of the petitioner.

The lawyer said the central bank in 2013 had provided a period of three years to the scheduled banks to adjust their capital market investment.

However, the BB, in its circular, most arbitrarily did not provide any time whatsoever to the NBFIs.

The lawyer also said in order to comply with the circular, the NBFIs would have no other option but to take back their loans, remaining with their subsidiaries and other companies involved in the capital market investment. It would require the companies to forcedly sell their shares and take back margin loans from the customers.

The BB circular also fixed the instruments that would be considered as stock market investment for the NBFIs. The central bank fixed the instruments for the first time.

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